But should you follow suit?

The Economic and Security Risks of Climate Inaction

Scientific consensus is clear: unchecked climate change presents a profound threat to economic growth and national security. Over a decade ago, the Department of Defense warned that climate change would exacerbate natural disasters, refugee crises, and resource conflicts. A 2024 assessment report from the World Economic Forum highlights climate risks to business profitability due to damages to fixed assets, and disruptions to supply chains. These warnings are now a reality. Zurich Insurance Group reports that in 2023 alone, global natural disasters caused $380 billion in economic losses. Data from the National Centers for Environmental Information (NCEI) shows that since 1980, the U.S. has suffered 403 weather-related disasters, each causing over billion dollars in damage. It is worth noting that before 1980, there were only three such billion-dollar events.

Ironically, the NCEI—tasked with providing up-to-date data for businesses to make informed, sustainable decisions—has now been deemed non-essential by the Department of Government Efficiency (DOGE). Many of its employees have been terminated, and its offices slated for closure.

Navigating Climate Action in an Era of Deregulation

Businesses now face tough choices. How to stay the course in the absence of regulatory pressure critical for collective action to combat climate change. Other may grapple with how to live up to their climate pledges while also being compliant with rules and regulations in this ever-changing landscape.

The current landscape, while challenging, has a surprising silver lining. It affords businesses with some breathing space. It is a gift of time that is free from expectations of stakeholders such as customers demanding sustainable products, or activist shareholders demanding rapid decarbonization, or legislators demanding mandatory disclosures. This is the moment to move beyond symbolic gestures and commit to genuine climate action.

Avoiding the Pitfalls of Greenwashing

Greenwashing—the practice of misleading consumers about environmental efforts—was coined by environmentalist Jay Westerveld nearly 40 years ago, when hotels promoted towel reuse as an environmental initiative while primarily aiming to cut costs. Since then, greenwashing has been enthusiastically adopted by businesses so much so that two-thirds of surveyed US executives admitted to engaging in greenwashing. A European Commission study found that over half of corporate sustainability claims are vague or misleading, while 40% completely lack any supporting evidence.

This practice is no longer just unethical—it’s financially risky. Stricter consumer protection laws worldwide mean businesses face mounting scrutiny and potential legal repercussions for deceptive claims. Additionally, social media amplifies reputational risks, making it easier for stakeholders to expose and publicize corporate hypocrisy. Research indicates that the resulting brand damage can have long-term consequences. Now is the time to eliminate greenwashing from your business model and thus reverse drain on resources while reducing the risk of alienating stakeholders.

The Path Forward: Thoughtful, Strategic Climate Action

Businesses worldwide have made bold commitments to climate action, but many struggle with developing concrete plans. A UK study found that while over 80% of FTSE 100 companies have pledged to achieve net-zero emissions by 2050, only 5% have publicly disclosed their transition strategies. A 2022 survey of 400 business leaders suggest that despite good intentions, there is a genuine struggle in aligning priorities. Balancing short-term financial pressures with long-term climate goals requires strategic thinking. Furthermore, companies lack critical competencies and metrics for measuring progress. Developing sustainability competencies goes beyond investing in technical expertise; it demands a mindset shift—one that places valuein understanding the risk and opportunities posed by climate change and a willingness to do something about it.

Integrity and Transparency: The New Business Imperatives

In a time of unprecedented change, taking a slow systematic approach may seem counter intuitive. Due to the very nature of policy turbulence in today’s context, stakeholders are unlikely to hold businesses accountable for doing an intentional reset on its climate plans. Knee-jerk reactions aimed at appeasing stakeholders can backfire, raising questions about whether initiatives are genuine or simply for show.

According to PwC’s 2024 study, a new generation of investors—set to benefit from intergenerational transfer of wealth to the tune of $68 trillion over the next decade—prioritizes brands at the intersection of disruptive technology and climate action. For these investors, integrity and transparency are not marketing buzzwords but essential business principles.

Climate change is an inconvenient truth that cannot be ignored or denied. Business leaders need to recognize that their actions—or inactions—will determine the severity of its impact in the years to come. Climate action and economic prosperity are not divergent paths and businesses can thrive when we the people and our environment thrive together.